Friday, May 31, 2013

DAILY FORECAST FOR USDJPY


BIAS: We should see losses to 100.24-39 and 99.84-94 before reversing higher

Resistance: 101.00 101.15 101.30-35 101.60-80
Support: 100.55 100.39 100.10 99.84-94

MAIN ANALYSIS: That was a bit of a whippy day but overall the outlook remains the same and I now look for losses down to 100.39 (max 100.24) for a correction that should remain below 100.90 to then see losses down to the ideal 99.84-94 target area. This should hold and trigger a reversal higher and initially back to the 101.50-80 area.

COUNTER ANALYSIS: Only a break below 99.40 would see more sustainable losses and back to the 98.57 low.

Above 101.80 would extend gains to the 102.27-52 area at least and note the 102.75-80 pivot resistance.

MEDIUM TERM ANALYSIS:
30th May:  Yesterday's losses do seem constructive and therefore while the broad 101.57-00 area caps I still feel the risk is lower to the triangle high around 99.88-01 and at mst 99.40-50. From here we should then see gains.  A direct break above 102.58 would also suggest a more direct rally.

Only below 99.40 and 98.57 would confirm the final high is already in place and would imply deeper losses over time. 

Good trading
Ian Copsey

Critical point for the Dollar


The puzzle was resolved but maybe a bigger one has arisen.

I didn’t get yesterday's answer right except in EURUSD and even that has moved to the higher end of my target range. During this process there were a couple of developments that make me uneasy. In one part of the structure the proximity of two waves were just a bit too close for comfort. (For those understanding Harmonic Elliott Wave it’s the proximity of the Wave -iv- to the Wave -b- of Wave -iii-.) Other than that the ratios were working well. In addition, while the other Europeans saw deeper Dollar losses than I would have liked, we are beginning to see some hourly Dollar bullish divergences. In the higher wave degree structure, as I see it, the combination of these levels and the divergences look appropriate. I was disappointed with the Dollar Index but feel this may well imply a stronger follow-through than I had originally planned.

So, while there is still a target window that should end yesterday’s moves there does seem to be a good argument for a return to Dollar strength. Failure will throw us back into a big and messy daily consolidation and I’ve love to avoid that… There is just one indication that this could happen – and that’s from AUDUSD that is approaching an important support that would imply quite a solid correction. Thus, for now it’s best to be aware that something larger is going to develop and we need to confirm whether it’s my favoured outlook … or not…

The JPY pairs played out their individual game plans, not entirely according to plan but with only minor deviation. In both we are facing some key decisions, in particular EURJPY that seems to have completed its triangle. My preferred outlook is bearish for the cross for a little more before recovering while USDJPY seems set to push back to the top of the huge daily consolidation. I still see USDJPY needing to make a new high. So there’s potential for both to be right but it’ll need some timing for the intricate combinations across all currencies to allow this to develop.

Be aware of the options today and what will confirm each outlook…

Have a great weekend
Ian Copsey  

Thursday, May 30, 2013

TECHNICAL INDICATIONS FROM 29th MAY

As usual, here are a few more observations from yesterday's developments. The charts display the day's support and resistance from the daily report issued around 2am-3am GMT and last for the rest of the day. 

Comments provide examples of integrating technical indicators and the implications. There seems to be restricted indications although the daily & weekly Clouds are providing support for the Dollar at this point.

These indicators and daily support and resistance are available free of charge on the fast and responsive WorldWideMarkets MT4 platform. Contact me for more details or sign up here. (Offer applies to non-U.S. residents.)


USDJPY
EURUSD
USDCHF
GBPUSD
EURJPY
AUDUSD
Good trading
Ian Copsey


An interesting puzzle…


The Dollar corrected lower yesterday as suggested. What next? Well, I made mention of the Dollar Index yesterday and how the 83.43 low should not be broken. Well, it didn’t break but it came pretty close. Equally, all three Europeans saw some hefty corrections and being so close to their recent corrective limits I began to wonder whether there could be a marginal break of 83.43 in the Index. The reasoning behind this musing was down to the fact that EURUSD is still out of phase with the other two and I still have a wish for it to move above the 1.2997 high, even if for just 1 point although having said that I feel it is likely to be more. However, if it is to be seen then it does look as if it needs to be EURUSD alone and not the others.

But then there’s the problem of the Dollar Index as yesterday’s low stalled a mere 3 points above the previous corrective low. The answer for the Index is in the structure. Yesterday’s 84.37 high appeared to be the end of a 5-wave move and that’s exactly what this needed to be within its current position and thus another 5-waves higher are required and for that we have a higher wave degree target.

Thus, at this point the argument tends to favour seeing the Dollar resume its uptrend. Quite how EURUSD reacts during this process is another matter although it’s not impossible to see a sideways consolidation. Thus, Dollar gains are favoured but beware of a sting in the tail.

USDJPY topped out and saw some equally solid losses to drag EURJPY down in its wake. Indeed, the moves were perfect, particularly in the cross that seems to now be in the final leg of a triangle. Here we may have a big clue from EURUSD as, just with the other Europeans, we should be expecting Euro losses once it has resolved its own structure. It tends to point to some consolidation in the JPY pairs though do be aware of the potential for a minor new low in USDJPY first. Thus, probably the JPY pairs are worth being left alone for now…

Good trading
Ian Copsey  

Wednesday, May 29, 2013

DAILY FORECAST FOR USDCHF


BIAS: I suspect a correction lower today

Resistance: 0.9780 0.9798 0.9817 0.9838
Support: 0.9734 0.9718 0.9697-02 0.9678



MAIN ANALYSIS: Yesterday's rally was quite persistent and reached to 0.9780 this morning. I am overall slightly mixed but feel the common theme I am seeing suggests a pullback lower. Just take note of the 0.9798 projection also. However, overall I see downward progress towards the 0.9718 corrective low - possibly the 0.9697-02 area. At these supports it wouldn't surprise me to see a mild correction higher. As long as this remains below 0.9780 we should then see losses below 0.9718 and 0.9690 to extend losses to 0.9645-55 at least. From this point begin to look for bullish reversal signals. The problem with this correction is that it has no ideal depth. Also note the 0.9630-40 area. 

COUNTER ANALYSIS: Any earlier break above 0.9798 would extend gains to the 0.9838 high. Take care here as this is another area that could trigger a correction lower. Above note 0.9859-76 and 0.9898.

MEDIUM TERM ANALYSIS:
29th May:  I think it's safe to say the rally has resumed but we've only seen the first leg of this rally. While 0.9631-60 supports (although even a 100% retracement would still be valid) we should see the uptrend resume. At this point I don't have the foundation waves to identify the next intermediate target but overall I do feel this rally will retest the daily 0.9971 high.

Only back below 0.9590 would concern and if this comes with a break of the Dollar Index at 83.43 we'll have to review as it will suggest further losses.

Good trading
Ian Copsey

Dollar to correct lower today


Hmmm… interesting day and a bit like a game of chess. The underlying development in the Dollar can be represented by Dollar Index that recorded an important low at 83.43 and has continued its move higher.  All the majors contributed to this rally yesterday but not all with the same structure. USDCHF and GBPUSD certainly seem to have resumed their basic Dollar-bullish moves, on USDJPY I am undecided while EURUSD remains a slight mystery with its structure not really clarifying what it wants to do. Indeed, I feel that there is one scenario that suggests it could even still break above 1.2997. Well, that we’ll have to ait and see.

As for the others I can’t help but feel that the current Dollar rally is running out of steam and due a correction and one that could be modestly deep. If there is any moment that EURUSD can spring a surprise then this could be it. Even then, if I have the structure right, it’s unlikely to be particularly direct. Thus, for the moment I’d rather pause and have this current (corrective) reversal confirmed and observe how this develops, or even whether it develops as it does seem to be a fine line in the sand between direct follow-through and my thoughts of a correction.

USDJPY rallied quite firmly yesterday dragging EURJPY in its wake. Here, too, we are at a critical moment. USDJPY has not broken above the 102.58 swing high, an event that would trigger further gains. Until that point there remains a risk of a return to Friday’s 100.66 low and possibly below. This event could obviously risk seeing EURJPY move back lower and extend its sideways consolidation. My preferred outlook for the cross is bearish but yesterday’s recovery tends to place it more in a rather widely swinging consolidation. Thus, the balance between USDJPY and EURUSD does look incredibly fragile.

Thus, there are quite a few balancing acts going on in what seems to be a web of interlaced structures that would imply some quite stifling corrections/consolidations.

The related problem would be that if this rather complex web of structures I think I see are figments of my imagination we could just see continued Dollar gains. I suggest taking care at this point but do remember that the basic Dollar direction is higher and thus don’t fight any significant strength beyond yesterday’s closing prices.

Good trading
Ian Copsey  

Tuesday, May 28, 2013

Finely balanced


Friday was quite interesting but ended with the market facing a dilemma, or perhaps more accurately I face that dilemma. The Euro stalled 1 point below an intermediate target I set. USDCHF stall 3 points below my retracement range. GBPUSD was less accurate but did see the upside extend a bit further as expected. All in all that looks pretty good on the face of things. What didn’t go so well was the depth of the correction lower from 1.2993 in EURUSD that was much too deep for my comfort. The result of this implies a different structure but one that (in a bearish outcome) would look skewed in terms of the downside projections while a bullish outcome has some structural uncertainty but would still suit all three Europeans. The one cautionary point, as I mentioned in the weekly video, is the downside limitations in the Dollar Index.

If there is any perfect solution it is for the Dollar to make new, marginal corrective lows and then see the Dollar uptrend resume. A notable correlation that would be encouraging is a stronger Aussie in a mildly deeper correction higher. However, this does have another possible option being a limited new low before a correction. Thus, I’d recommend watching for the first break and then note the limits on each side of the market.

USDJPY lost out on Friday as expected and dragged EURJPY along for the ride. These two have a slight deviation in their respective outlooks. I certainly feel, as we start the day, that the better approach is to wait for the first move as yesterday’s holiday consolidation has injected a difficult sideways move that complicates the structures. Both do look like extending their losses but there is a question mark over whether this will develop directly or following a correction higher.

What we should note is the apparent limited downside in USDJPY and possibly in EURJPY although that seems to have slightly more leeway in any decline. A pullback higher in USDJPY would be helpful but we’ll have to wait and see whether this will be direct or after a minor dip.

Thus, I see the Asian session likely to display its habitual range trading and for Europe to make more of an impact.

Have a profitable week
Ian Copsey